Fears 100,000 jobs could go in 'imminent' British car plant closure

Rochdale_Pioneers

funkyfreddy9k wrote: »

so if its Land Rover, is that just the plant shutting or the whole company going? Was the government support package not good enough? too little too late again from the government?

As I understand it, Solihul makes their entire output of Defenders, Discoverys, Sports and Range Rovers, with just the Freelander made elsewhere (Halewood).

mizzbiz

scousethife wrote: »

I was told a few years ago that car dealerships made far more money on the finance than on the car they sold

This is fact. When I was a student, I worked as a temp in the summer holidays for a Renault dealership. The salesmen (proper slime-greasers - the stereotype is true), actually treated customers with cash abysmally, as they didn't make much comission on the sale.

The whole operation was about selling finance deals, not cars. The great one at the time was to get 18 year olds stuck on finance deals with the lure of free insurance for a year.

funkyfreddy9k

this makes no sense though, only two days ago JLR came to an agreement with unions which would supposedly safegard jobs for 2 years. Its either not them, or something else has happened with them.

Really2

I thought Vauxhall UK employs over 5000?
http://www.telegraph.co.uk/finance/newsbysector/transport/3725780/GM-offers-Vauxhall-workers-sabbatical-as-UK-Government-mulls-car-industry-rescue.html

Vauxhall owner GM, which employs 5,500 people in the UK, has offered employees at its Ellesmere Port plant in Merseyside sabbaticals of between two and nine months next year on 30pc pay.

evans17

Really2 wrote: »

I thought Vauxhall UK employs over 5000?
http://www.telegraph.co.uk/finance/newsbysector/transport/3725780/GM-offers-Vauxhall-workers-sabbatical-as-UK-Government-mulls-car-industry-rescue.html

Vauxhall owner GM, which employs 5,500 people in the UK, has offered employees at its Ellesmere Port plant in Merseyside sabbaticals of between two and nine months next year on 30pc pay.

The 5000 will probably be Ellesmere Port and the Luton plant. Ellesmere Port employs approx 2000 people.

dopester

Rochdale_Pioneers wrote: »

Supply and demand guys. Supply MASSIVELY outstrips demand, so the dealers need to create it - and that means stonking creat price cuts and more importantly finance deals.

It does. Worldwide manufacturing overcapacity.

I'm not sure about finance deals though.. we could easy take one out but the APR is not attractive, and the family member has job uncertainties to consider - when taking a loan for 3 years - especially when we believe car prices will have to fall. So we keep the older car, which I can do the basic service on, and find a cheap mechanic for more difficult stuff if ever required.

Shipping rates on the floor,

Lufthansa's air freight division is putting 2,600 staff on short-time working, while cargo ships have so many empty containers that shipping rates are a tenth of what they were at last year's peak.

This financial crisis is now truly global
Telegraph.co.uk - ‎6 hours ago‎

global steel prices in a free fall, car manufacturers putting the squeeze on component companies to reduce their costs, advertising prices (TV, newspaper, internet) under sharp downward pressures, pressure on pay-levels (I'd prefer to work and get paid a lower amount, rather than receive even less on the dole).

Prices need to come down for demand to be established. The ability to pay.

There are so many difficult deflationary forces to consider, and solutions not easy - except for knowing the authorities should have the courage to just ensure the market has the framework and freedom, to be allowed to come up with those solutions.

Wasting money to prop up lots of failing companies, determined to sell stuff at prices few can afford or want to borrow money for, isn't the way out.

There are many experts, of course, who will say that the key to prosperity is to revive manufacturing. Their prescription to do this is to focus inventives in ways that encourage longterm, fixed investment. It sounds plausible when viewed from a conventional perpsective. But it is backward-looking and probably won't work.

The reason fixed investment is lagging is that its productivity has fallen. Most of all the industries that figured in the post-World War II boom now face saturated markets with worldwide overcapacity. Force-feeding additional capital into fixed investment in the manufacturing side will only aggravate the long-term problem by increasing the overcapacity. It also takes resources away from the small business sector which creates new jobs.

Saturated or slowly growing replacement markets with overcapacity require companies to compete by increasing productivity. This is a good thing in itself. But higher productivity with flat markets means fewer jobs. Short of buying the products directly and giving them away, which is obviously ruinous, there is little that can be done to rescue oldline manufacturing in aggregate.

The hope for the future lies in incubating new products and services, in other words, in entrepreneurship. To do that, flexibility and adaptability must be the hallmarks of the economy and government policy. Legions of small businesses should be encouraged to form. Many ideas need to be tested in the market place in order to come up with the 20 to 30 major innovations that will create vigorous economic growth.

Unfortunately, that is not likely to be the path that policy takes.